Frequent flyers are increasingly dissatisfied with airline loyalty programs. To maximize profits, carriers have turned them into byzantine and often frustrating reward schemes to the point that they now risk alienating many customers.
The main issues are that the number of miles needed to get a free flight ticket or a hotel room is skyrocketing, frequent flyers are often forced to pay fees to redeem points, and more in general the fine print resembles the arcane scripture of an obscure sect only initiates can decypher.
The morale is that airlines need to upgrade their loyalty programs. I argue they should seize the opportunity to make them greener too.
The civil aviation industry “is under considerable pressure,” said Alexander de Juaniac, the CEO of International Air Transport Association (IATA), last June. He was referring to mounting concerns over the environmental sustainability of the industry. Global aviation produces around 2% of all human-induced Carbon Dioxide . However, emissions from air travel are accelerating many times faster than other Co2 emitters and UN data project that aviation might become the single biggest emitter of C02 by 2050. The industry is scrambling to find solutions to make the sector more environmentally sustainable but there’s no easy fix in sight.
What is certain is that airline loyalty programs incentivizing frequent flyers to fly even more are a thing of the past. Could such programs stop offering free seats and focus only on other benefits like hotel rooms, cabin upgrades and other kinds of discounts? What else could be done to make them more climate-friendly?
In July, Australian flagship carrier Qantas introduced “Fly Carbon Neutral,” a new reward program that allows frequent flyers to earn 10 “Qantas Points” per $1 spent on carbon offsetting. The money will go to non-profit projects selected by the airline, including initiatives to protect the Great Barrier Reef and power renewable energy around the world. According to the company, the number of loyalty program members offsetting their flights surged by 15% since the program took off.
However, carbon offset programs have attracted their fair share of criticism. In a letter to the Financial Times, Andrew Murphy, aviation manager at Brussels-based NGO Transport&Environment, argued that, “since the Paris Agreement has introduced a legal requirement for all states to bring all emissions to zero [...] it’s impossible to establish a mechanism where one can pay another to cut their emissions, when both parties are legally bound to get their emissions to zero.” Moreover, determining the effectiveness of carbon offset schemes is still quite difficult.
At the same time, Qantas’ move certainly is a first stab at innovating loyalty programs, a product that is in need of becoming not just more customer-oriented but also more climate-friendly.
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